help Im £30k in debt

ig88

Hi all

A family friend has run up aprox £30,000 in credit card bills on 2 seperate cards and has been in denial about it keeping it secret from his family and has asked me for advise I have arranged an appointment with the CAB but I wondered if anyone could offer any advise on the best way of dealing with it. The person is a home owner and morgage free however they are in their 60s approaching retirement and would not want to remorgage to pay off the credit cards any help anyone can offer would be very much appreciated

Tixy

Hi

Contacting CAB (or any of the debt charities) is definitely the right way to go. When they go to the appointment it would probably be an idea to take details ofthe debts and an income & expenditure account with them - in fact this statement of affairs calculator if useful, if they complete that and take it with them that should be most of the info the debt advisor would need - http://www.makesenseofcards.com/soacalc.html

Are they able to keep up with minimum payments in the meantime? If not then they could write and just offer token payments whilst they seek advice. However if one of the cards (or both) is with the bank they hold a current account with they would be vulnerable to offsettig. Either don't go to token payments for that card or otherwise open a new bank account elsewhere first and ensure all income/salary etc is paid into the new account before the letter is sent.

If person has a joint mortgage or joint finances with a spouse or someone they really do need to open up about the debts and problems.

skintandscared_2

If they cannot meet the minimum payments I strongly advise them to contact one of the free debt help sources - CCCS or PayPlan. They are amazing. CCCS has helped me sleep at night and can't recommend them highly enough. Also a trip to the debt free wannabe board and posting a Statement of Affairs (SOA) will help give them ideas on where to make cutbacks so they don't need to use the credit cards and can live within their means (the only permanent solution to a debt free life!!!)

ig88

Hi Tixy

thanks for your propt reply I have only found out about this earlier today and the person is still a bit in deniel about the whole situation and has unfortunatly buried his head in the sand he has been making sporadic payment as and when he has been able to. Im not sure if the cards are with the same bank they bank at, I will check and advise them of what you say about seperating their bankable income from the creditcard debts. thanks also for the link to the statement of afairs calc.

ig88

Hi Skintandscared

Thanks for the reply I not too sure if the minimum payments are affordable or not as I dont know what they are. I doubt whether he knows himself as I say he has been keeping it secret from everyone. My feeling from what he has said is that the debt has just been mounting for the last 2 or so years and he has been hiding from it.I will check out both the cccs and payplan thanks for your help

Paul556

Hi,

I am 45 and not obviously retired! But I have the same problem and a year ago went to the CAB as I could no longer afford the minimum payments. Yes, you need to be able to give them at least approximate figures for income and expenditure and in my case they calculated token payments across 4 credit cards which I am still paying. Literally approximately £20 per month across the 4 cards of £35k debt. Most were happy to accept. Only one has passed the debt to a credit agency but they are now 'happy' with the token payment.
The main thing is to be up-front and completely honest with the CAB. They don't judge you. We all have our reasons for being where we are. It's such a relief when you walk out with a sense of direction.

ig88

Hi Paul565

Thanks for your post I will help to gather details and go from there

Degenerate

ig88 wrote: »

The person is a home owner and morgage free however they are in their 60s approaching retirement and would not want to remorgage to pay off the credit cards

They need to start being realistic for a start.

ig88

Hi

I have spoken to the cccs and they were very helpfull. They suggesting both a DMP and IVA as likely solutions to the problem I have arranged an telephone appointment for my friend who has organised paperwork needed (the debt is actually closer to 25k than 30k).
I was just a little concered that the person I spoke to at cccs told me that they are funded by the banks and get commission from the banks and also that the repayment you make in both DMP and IVA is made to cccs directly who forward it on to the banks is this normal? should I be concerned?

Tixy

Totally normal, and nothing to be concerned about.

CCCS are partly funded by the banking industry but are also a charity. They will act in the best interest of your friend and the advice will be based on what is the best option for them.
Being funded like this means that if they run a DMP for your friend they will not have to pay any fees to CCCS. All of the money paid over goes to the creditors (commercial DMP companies charge an upfront fee of several hundred and a monthly fee from each monthly payment).

If your friend decides on an IVA then there will be fees to pay whether it is done through CCCS (or technically their sister company) or from a different IP. If friend decides on an IVA I would suggest contacting 2 or 3 IPs before making a decision which one to use.

You might also want to seek advice or do some reading on the IVA board here IVA & DRO board and have a read of this guide - IVAs are they worth it

chattychappy

ig88 wrote: »

(the debt is actually closer to 25k than 30k).

Must be a first, overestimating outstanding debt.

Good luck to your friend.